Business activity to rise in the next six months as economy expands

Business activity in Nigeria is expected to strengthen over the next six months as firms anticipate improved economic conditions, according to the latest Business Expectations Survey (BES) released by the Central Bank of Nigeria (CBN).

The report shows that businesses remain broadly optimistic about the macroeconomic environment, with the confidence index rising from 15.6 points in March 2026 to a projected 43.9 points within six months, signalling expectations of sustained expansion.

This positive outlook is also reflected in projections for business activity, which firms expect to increase steadily over the coming months, driven by higher demand, improved financial conditions, and better access to credit.

Across key sectors, businesses reported confidence in both current operations and future performance. Agriculture recorded the highest optimism on the macroeconomy for the current month, while mining and quarrying led in terms of operational confidence.

The mining and quarrying sector posted the strongest confidence in own operations at 47.8 index points, underscoring expectations of increased output and investment in the sector.

Firms across sectors also signalled expansion plans, with many indicating intentions to scale operations and increase hiring in April 2026. Employment prospects were strongest in mining and quarrying, while agriculture led expansion plans.

In line with expectations of rising activity, businesses anticipate increasing their workforce in the near term. Survey responses show positive employment outlooks across all sectors and time horizons reviewed.

This suggests that improved business conditions could translate into job creation if current expectations materialise.

The survey reveals disparities in sentiment across regions. While the North-East recorded the highest optimism at 39.4 index points, the South-East remained the only region with negative sentiment at -5.5 points in the current period.

However, forward-looking indicators show that all regions expect improved business conditions over the next six months, pointing to a more balanced recovery across the country.

Despite the positive outlook, businesses continue to face significant headwinds that could limit growth.

Top concerns identified in the survey include inadequate power supply, insecurity, high and multiple taxes, elevated interest rates, and financial constraints.

These structural challenges remain critical risks to sustained expansion, as they directly impact operating costs and profitability.

On the macroeconomic front, respondents expect the naira to appreciate against the US dollar over the review period, while borrowing conditions are also projected to remain relatively stable.

This outlook appears to be supporting business confidence, particularly in sectors dependent on imports and financing.

Average capacity utilisation stood at 52.5 percent in March 2026, indicating moderate production levels across sectors. Manufacturing recorded relatively strong utilisation, suggesting resilience in industrial output.